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There was plenty of discussion about that at the recent Energy
Summit 2006, hosted by the Louisiana State University Center for
Energy Studies. But whether or not Louisiana experiences another
Katrina, participants in the two-day seminar agreed plenty of
challenges face the nation's energy infrastructure.

Katrina was a serious blow, but many speakers noted how
effectively the industry responded. Numerous offshore oil and gas
wells were hit by 170-mile-per-hour winds and 45-foot waves. As a
result, gasoline prices had a record one-week jump of 46 cents
after Katrina hit in late August 2005 and exceeded $3 per gallon by
Labor Day.

But repair efforts were swift. Enough capacity was brought back
online that, by Week 2, prices had leveled off and began to
decline. Even with Hurricane Rita causing additional damage a few
weeks later, pre-Katrina prices returned by November.

Moreover, "there was no loss of life among energy sector
workers, and not a single significant oil spill from any offshore
facility" noted Michael Kearns of the National Ocean Industries
Association. Katrina provided the industry with a real-world,
worst-case test, and the industry did quite well.

Nonetheless, Katrina did underscore the need for more domestic
energy. The waters off Louisiana and Texas aren't the nation's only
offshore areas with oil and gas, but they're the only such areas
not under severe federal limits on drilling. There is energy in the
Pacific, Atlantic, offshore Alaska and the eastern Gulf, according
to Rory Miller, a vice president for Williams Field Services.
However, these areas are subject to federal moratoria on energy
production.

If Washington were to change this policy and open some of these
other offshore areas, America would not only enjoy greater
production and lower prices but less vulnerability if any one
region suffered a natural disaster. And the strong environmental
record in Katrina's aftermath should provide confidence that
additional drilling would be safe.

When Katrina's onshore devastation knocked out several of
Louisiana's refineries, domestic refining capacity was already at
its limits. The ability to refine sufficient quantities of gasoline
and diesel fuel was barely keeping pace with growing demand. No new
refinery has been built in the U.S. since the 1970s, and regulatory
costs and delays have hampered expansions at existing refineries.
Several expansions are in the works, but as John Felmy of the
American Petroleum Institute notes, they must run a lengthy
regulatory and procedural gauntlet. Even modest changes to expedite
the approval of additional refining capacity would help.

Hurricanes or no, America will need more energy, including
natural gas. Indeed, in percentage terms, natural-gas demand has
risen higher and suffered greater post-Katrina price volatility
than oil. Homeowners, natural gas-dependent industries such as
fertilizer and chemicals production, and the electricity generating
sector all will need increasing amounts of natural gas. According
to A. Michael Schaal of the Energy Department's Energy's Energy
Information Administration, demand is expected to outstrip
production.

Thus, beyond increased access to domestic natural gas fields, we
also need to diversify via increased imports of liquefied natural
gas. LNG provides a way to efficiently transport natural gas from
parts of the world with excess supplies to the U.S. "More LNG
receiving terminals and supplies are required to meet growing
energy demand," said Bill Cooper, executive director of the Center
for Liquefied Natural Gas. Provisions in last year's big energy
bill will help, noted Mr. Cooper, but regulatory hurdles and local
opposition must be overcome before LNG can meet its
potential.

Notwithstanding the weak 2006 hurricane season, Mr. Miller and
others noted hurricane frequency runs in patterns and we're likely
in the early stages of a period of increased storm activity.
Katrina may have been unusually severe, but future hurricanes
nearly as bad are inevitable, and the Gulf's energy sector will
need to deal with large-scale damage again. And it will need to do
so in the face of continued energy demand growth, which means even
less cushion against price spikes.

In effect, hurricanes will make an already-challenging energy
situation even more so. Now's the time to expand domestic supplies
and build additional resilience into our domestic energy
infrastructure -- to secure a more affordable and reliable energy
future.

Ben Lieberman is
a senior policy analyst at The Heritage Foundation (heritage.org),
a Washington-based public policy research institute.